AS Microeconomics: Brits and the Price Elasticity of Supply

Last year, many councils were caught short of grit - the stuff we put on roads if they are icy. This year, some councils were able to supply the grit at short notice - when demand for grit rose due to the current severe weather conditions. See how Bradford is coping with the snow.

The price elasticity of supply is governed by BRITS:

Barriers to entry - whether new firms can supply a market

Raw materials - whether these are readily available

Inventory - whether or not businesses have stockpiled the product

Time - how long it takes to produce and bring the product to the market

Spare capacity - this is often the case in a recession, factors like labour and capital are underemployed. Hence, a firm can react quickly if demand for its products rises.